O'Malley Defends $10.10 Minimum Wage

Maryland is already moving toward a "two-tier" minimum wage system, where counties will set their own minimums, Gov. Martin O'Malley said Monday. But he wants to make $10.10 the statewide floor and let counties raise it from there.

O'Malley was arguing for the wage increase before the Senate Finance Committee.

Chairman Thomas Middleton, a Charles County Democrat, told O'Malley the committee is "certainly considering" leaving the minimum wage decision up to each county. Given the income disparity between Maryland's richest and poorest areas, some lawmakers have argued that a "one-size-fits-all" approach would be reckless.

O'Malley replied that under his bill, counties could continue setting their own minimum wages. Montgomery and Prince George's counties recently raised theirs to $11.50 an hour.

But he wants the statewide minimum to be higher than the current $7.25.

"$10.10 is actually pretty modest, considering the way that inflation has eaten away at the value of the minimum wage," he said.

He said declining to raise it would effectively "freeze wages at poverty level" for 400,000 state residents.

The minimum wage in 1968 comes out to $10.70 in today's economy, according to the dominant measurement of inflation, said David Cooper, a policy analyst with the Economic Policy Institute. Another measurement puts the 1968 minimum at about $9.50 an hour.

Cooper testified alongside O'Malley on Monday.

Sen. David Brinkley, a Frederick County Republican, asked O'Malley's panel about potential job loss. He said the bill might force businesses to lay off impoverished workers, including single mothers.

Lt. Gov. Anthony Brown admitted it might cause some collateral harm.

"I think most everything that you do in Annapolis has both a micro and a macro impact," Brown said. "And there are going to be those on a micro level who won't benefit or who may be harmed by what we do."

But the key, Brown said, is to look at the bigger picture. The bill would stimulate spending in the retail and food industries, which would offset those businesses' increased labor costs, he said. And some economic studies suggest it would help more people than it would hurt.

Brinkley wasn't convinced.

"We don't have an answer for those people who are going to lose their jobs should this take place," he said.

Stephen Fuller, a George Mason University professor specializing in economic development, testified later on Monday that increasing the minimum wage to $10 would cost the state about 11,502 jobs.

On the other hand, many mainstream economic studies have shown minimum wage increases to have minimal effects on employment rates.

Senator Middleton, the chairman, said he will dedicate another committee session soon to reviewing hard economic data.

Senate President Thomas V. Mike Miller said last week he wants the House to pass a minimum wage bill before the Senate votes on one.

As the committee considers this bill, and several others, some senators are offering an alternative of a smaller minimum wage increase and an increase in the earned income tax credit.

Legislation in the House and Senate incrementally increases the state refundable earned income credit from 25 percent to 30 percent of the federal allowance over five years.

Respnding to that proposal, the governor said he believed the $10.10 minimum wage was a better idea.

"I don't think raising the minimum wage is a substitute for the earned income tax credit or vice versa," O'Malley told WBAL-TV.

"I'm focused on achieving a minimum wage that is at least $10.10 and I believe there is a consensus to do that," O'Malley said.